Business

Wednesday March 11, 2009

Developers hopeful interest relief will boost house sales

By ANGIE NG


PETALING JAYA: Developers are hopeful that the government’s tax relief on interest paid on housing loans of up to RM10,000 a year for three years which will lower the tax bracket for house buyers, promote stronger buying interest for houses and give a boost to the market.

The latest measure announced under the second stimulus package or mini-budget will lower the cost of owning a property.

“Hopefully the tax relief will also apply to all existing house buyers who have taken loans for their house purchase,” a chief executive of a property company said.

If the tax relief only applies to new housing loans, then the impact would be insignificant as buying activities had slowed down tremendously after the global financial crisis hit the country’s shores around the third quarter of last year, he said.

In welcoming the incentives for the housing sector, Mah Sing Group Bhd managing director Datuk Sri Leong Hoy Kum said the tax relief on interest paid on housing loans of up to RM10,000 a year for three years would result in further savings on the cost of owning a property.

“This will encourage investment in properties which is seen as a good hedge against inflation. We look forward to the further liberalisation of the Foreign Investment Committee (FIC) guidelines which will provide a boost for the property sector,” Leong added.

Khazanah Nasional Bhd’s increased investment for infrastructure projects in Iskandar Malaysia and the expansion of the Penang International Airport will also augur well for the property sector.

He said by allowing house buyers who had been retrenched to defer the repayment of housing loans for a year, it would provide better cashflow to them and lower the probability of loans going into default.

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